VAT on Commissions?

[Faddy]

I appear to have been badly misinformed. An accountant I had a word with told me, and assured me, you do not pay VAT on commissions received from selling something on behalf of someone else. However, I had a feeling I should double check this, and the hmrc website includes this:

'In addition to charging VAT on the goods and services that you supply to your customers, you must account for and pay VAT on:

• commission received from selling something on behalf of someone else'

Can someone shed some light on this please? I know looking at the hmrc website really should clear it up but coming from an accountant I am just double checking and double checking again.

 

[UK Contractor Accountant]

Depends on the vat status of the underlying goods or services sold on behalf of the principal. If the goods/services are vatable so is the commission received.

 

[lesvatadvice]

In most cases, commissions are vatable.
It is only if you are dealing with underlying supplies which are exempt (e.g: financial services, insurance) that commissions can be exempt. And even then they are not always exempt!